June 7 (Bloomberg) -- New York Yankees co-owner and
managing partner Hal Steinbrenner prevailed in a lawsuit brought
by the Internal Revenue Service seeking to recover $670,494 from
what the government alleged was an unwarranted tax refund.

The IRS, in a complaint filed in federal court in Tampa,
Florida, sought to reclaim the funds issued to Steinbrenner in
December 2009. The refund stemmed from disputes between
Steinbrenner and the IRS over the 2001 tax year and audits of
the Major League Baseball team’s parent company for 2001 and
2002, according to court papers.

U.S. District Judge Steven Merryday today ruled that the
IRS sought “impermissibly in this action to disestablish,
impinge, blur or selectively ignore” federal law setting
boundaries on the tax treatment of partnerships in that the law
didn’t apply to Steinbrenner’s deadline for seeking a refund.

Hal Steinbrenner is one of the children of George
Steinbrenner, who died in 2010. George Steinbrenner and the IRS
settled the questions raised in the audit in an agreement
accepted on March 1, 2007, according to the complaint.

That agreement resulted in adjustments to the tax returns
of the beneficiaries of a family trust, including Hal
Steinbrenner’s 25 percent share. According to the complaint, Hal
Steinbrenner paid his taxes in 2008, and then filed an amended
2001 tax return in 2009 seeking a refund because of a
$6.8 million net operating loss carried back from 2002.

Five Months

The IRS paid the refund, and then said that the refund
claim should have been filed by March 1, 2009, more than five
months before Hal Steinbrenner sought the refund.

Dean Patterson, an IRS spokesman, declined to comment on
the ruling, saying federal law prohibits the agency from
discussing specific taxpayers.

“It’s the right result and we’re very pleased,” Ed Koren,
a lawyer for Steinbrenner at Holland & Knight LLP, said in an
interview. “It was a very technical issue.”

The case is U.S. v. Steinbrenner, 11-cv-02840, U.S.
District Court, Middle District of Florida (Tampa).